That is one business model. Nintendo for example doesn't use that model, and Sony and Microsoft typically don't either towards the end portion of a console generation (eg, if a console gen lasts 7 years they're still making hardware with the same capability towards the end, and it's typically much cheaper to make by then).
Overall though consoles still represent a pretty good value. $400-500 for a system that is guaranteed to play everything for the next 6-7 years without worrying about upgrading specific
Subsidize razor to profit off blades (Score:3, Insightful)
Consoles are loss-leaders. It's commissions on game sales they really want.
Re: (Score:2)
That is one business model. Nintendo for example doesn't use that model, and Sony and Microsoft typically don't either towards the end portion of a console generation (eg, if a console gen lasts 7 years they're still making hardware with the same capability towards the end, and it's typically much cheaper to make by then).
Overall though consoles still represent a pretty good value. $400-500 for a system that is guaranteed to play everything for the next 6-7 years without worrying about upgrading specific
Re:Subsidize razor to profit off blades (Score:2)
Uh... yeah. Nintendo doesn't charge less money for their games than anyone else.
I remember when Nintendo was bragging that no 1st-party Wii game would cost more than $50... and they completely broke that promise.
Re: (Score:2)
That's not the point. The point is that they don't typically sell the consoles at a loss. They make a profit on both the consoles and the games.